Tech City: the Future of Inner East London’S Digital Economy
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A TALE OF TECH CITY: THE FUTURE OF INNER EAST LONDON’S DIGITAL ECONOMY Open Access. Some rights reserved. Centre for London is a new politically independent, As the publisher of this work, Centre for London wants to encourage the not-for-profit think tank focused on the big policy circulation of our work as widely as possible while retaining the copyright. challenges facing London. It aims to help London We therefore have an open access policy which enables anyone to access our content online without charge. Anyone can download, save, perform build on its long history as a centre of economic, or distribute this work in any format, including translation, without written social, and intellectual innovation, and create a fairer, permission. This is subject to the terms of the Centre for London licence more prosperous, democratic and sustainable city. found at the back of this publication. Its main conditions are: Centre for London acts as a critical friend to · Centre for London and the author(s) are credited London’s leaders and policymakers, and promotes a · This summary and the address www.centreforlondon.co.uk are displayed wider understanding of the challenges facing London. · The text is not altered and is used in full · The work is not resold The Centre develops long term, rigorous and · A copy of the work or link to its use online is sent to Centre for London. radical policy solutions for the capital. It works collaboratively with its supporters, drawing on their You are welcome to ask for permission to use this work for purposes other than those covered by the licence. Centre for London gratefully acknowledges experience and expertise. the work of Creative Commons in inspiring our approach to copyright. Centre for London is incubated by the national To find out more go to www.creativecommons.org. think tank Demos. This report has been produced with the support of the British Venture Capital Association, British Telecommunications Plc, London & Partners and the Federation of Small Businesses. Thanks also to our colleagues at Demos. Published by: Centre for London 2012 © Centre for London. Some rights reserved. Third Floor Magdalen House 136 Tooley Street London, SE1 2TU T: 0845 458 5949 F: 020 7367 4201 [email protected] www.centreforlondon.co.uk Series design by StudioAparte BIOGRAPHIES Rob Whitehead Rob Whitehead is Deputy Director (Research) at Dr Max Nathan Centre for London. He leads on all research for the Max is a Research Fellow at lse’s Spatial Economics Centre, and was co-author of London’s Calling – Centre Research Centre and at lse Cities, where he works on for London’s inaugural research into social mobility and urban economics and economic development issues. higher education. He completed an urban policy and spatial economics He is a regular commentator on London issues in phd in lse’s Geography Department in 2011 on the local, national and international media. Rob has taught economics of cultural diversity in British cities. at ucl and London Metropolitan universities. Prior to Max has over 12 years’ experience working in think establishing Centre for London he was head of strategy tanks, consultancy and public policy. Most recently, he at the London Development Agency, working on, among worked at the uk Department of Communities and other things, Olympic financing, worklessness and Local Government (dclg) as an esrc-dclg Senior Policy economic policy. Adviser, covering localism, regeneration, innovation and Rob holds an mba from Cranfield University and economic development. em Lyon. Before his immersion in London policy issues In 2005, Max helped set up the Centre for Cities he worked in management roles in the private and not- think tank, where he ran the research programme, and is for-profit sectors in London, Spain, and Latin America. now a member of the Centre’s Research Advisory Board. (@DailyRobbery) (@iammaxnathan) Emma Vandore An urbanist and writer, Emma has 15 years of political and economic journalism experience. Formerly head of the economic service for the Associated Press in Paris and Bloomberg’s chief political reporter in France, Emma has covered a breadth of industry sectors and political issues. She has worked across the globe, recently focusing on London and West Africa in policy and communications roles for organisations including the Financial Times and the Town and Country Planning Association. Emma has a masters in spatial planning from the Bartlett (ucl), where she specialised in regeneration with a focus on London’s East End and the Olympic Park area. Her publications include the 2007 book on French politics, Schizophrenie Francaise: Sego, Sarko, Jacques et moi. (@emmissima) 4 5 CONTENTS Acknowledgements 9 Foreword: Ben Hammersley, The Prime Minister’s Ambassador to Tech City 11 Executive summary 15 1. INTRODUCTION 28 2. CITIES AND THE DIGITAL ECONOMY 38 3. UNDERSTANDING THE CLUSTER 48 4. VIEWS FROM INNER EAST LONDON FIRMS 64 5. FUTURE SCENARIOS 90 6. CONCLUSIONS AND RECOMMENDATIONS 96 Appendix 1/Project Methodology 112 Appendix 2/Defining the digital economy 116 Appendix 3/Datasets 120 Appendix 4/Glossary 124 Notes & References 128/129 7 ACKNOWLEDGEMENTS We would like to thank all the firms, entrepreneurs, policymakers and other stakeholders who gave up their time to take part in the research. Without their co-operation this project would not have been possible. Many thanks to Charles Armstrong and Craig McMillan at Tech City Map, and Kam Star at Digital Shoreditch, for access to the Tech City Map database; to Dr Duncan Smith at ucl/casa for gis maps; Andrew Connolly at DueDil for access to the Real London Tech StartUps dataset; Richard Welpton and the Secure Data Service for access to bsd and sbs datasets; Eric Van Der Kleij at tcio for his patient input and Ben Hammersley for writing the foreword. Thanks also to everyone who participated in the project roundtable in April 2012, and to participants at a ucl/Bartlett seminar in April for input on early versions of the report. Many thanks to the staff and interns at Centre for London and Demos who helped bring this project to fruition: Roland Chanin-Morris, Kat Hanna, Beatrice Karol Burks, Ben Rogers, Margaux Salmon, Ralph Scott and Jess Tyrrell. Finally, credit is due to Graeme Evans, Chris Orange and Margarethe Theseira for their helpful comments and advice. The views in this report are those solely of the authors. All errors and omissions remain our own. We would like to thank our partners British Venture Capital Association, British Telecommunications Plc, London & Partners and the Federation of Small Businesses for their support for this work. While they have offered advice and expertise, the findings and recommendations in this report are the responsibility of Centre for London alone. Disclaimer: This work includes analysis based on data from bsd, produced by the Office for National Statistics (ons) and supplied by the Secure Data Service at the uk Data Archive. The data are Crown copyright and reproduced with the permission of the controller of hmso and Queen’s Printer for Scotland. The use of the ons statistical data in this work does not imply the endorsement of the ons or the Secure Data Service at the uk Data Archive in relation to the interpretation or analysis of the data. This work uses research datasets that may not exactly reproduce National Statistics aggregates. All the outputs have been granted final clearance by the staff of the sds-ukda. 9 FOREWORD Nowhere but a megacity like London, with its massively diverse, intensely globalised, traditionally innovative population, can really have a chance at succeeding in this most 21st century of revolutions. It is massively to the credit of the Coalition Government that it has noticed, and chosen to nurture, the disruptive forces a few miles to the east of Westminster, in the cluster of digital activity the Government has dubbed ‘Tech City’. The Government’s support, both vocal and financial, is a key factor in helping this cluster flourish in these very early years. Of course, for every cheque we need a balance, and that is why reports such as this one are so very welcome. Hype, branding, the promise of a boom or the fear of a bubble will all obscure what is really going on if neutral but in-depth investigations like this are not made and regularly repeated. Indeed, both local and national government policy must be made in the same manner as the products of Tech City itself: iteratively, with constant attention to user feedback. In that way, Tech City policy may never be complete – it may never be possible to say precisely what it is, as if it was a finished, bound, completed thing. Government policy, influenced by reports such as this, should be in perpetual beta. Data driven policy is only as good as the data itself, and so it is with joy that I note this report’s attention to detail. We should all welcome the most comprehensive analysis to date of what and who makes up Tech City, and what it is the entrepreneurs behind the firms say they want from government. Combined with future repeat research – which I urge the authors to consider – we will be able, as policymakers, businesspeople, and academics, to have a much greater, deeper, and more effective understanding of both the potential and the dangers of interventions such as Tech City. Clusters, as the report writes, are not to be made artificially. They cannot be. Instead, they grow and blossom organically from the rich soil of the surrounding 11 city. London is a special place, fertile with creative influences. Tech City is a success, and will grow, not because of the Tech, but because of the City – the humanity, the rubbing together of cultures, the tensions and the beauties therein.